Asked whether it planned to allow ride-sharing services under a future version of the act, to be legislated this year, a spokesman for Transport for NSW said: "Taxis must be licensed, with authorised drivers using the taxi meter. None of these requirements will change."

Motorists carrying passengers who are not licensed to do so face fines in NSW of up to $110,000.

A spokeswoman for Roads and Maritime Services said the department had "received allegations Uber has breached the Passenger Transport Act and is investigating. If there are found to be breaches, companies and individuals can be pursued as appropriate."

A message that appeared on the Uber app for Sydney users on Wednesday evening. Photo: Ben Grubb

The general manager of Uber Sydney, David Rohrsheim, said NSW riders and drivers were flocking to Uber because it was solving a problem that had stood for decades: "The inability to get a safe, reliable ride when and where needed."

He said: "We’re confident that in the long run, rather than continue to shield entrenched taxi interests from new competition, Transport NSW will stand up for consumers and drivers."

If one of Uber's drivers were to receive a ticket as a result of using Uber’s technology, Mr Rohrsheim said his company would "absolutely stand by them".

Mr Rohrsheim's comments came as Uber launched on Wednesday night its low cost ride-sharing service, now dubbed UberX, to everyone who uses Uber in Sydney. It had previously offered the service under the name "low cost" to a select number of Uber users.

The chief executive of the Taxi Council, Roy Wakelin-King, said he welcomed the government's reiteration that ride-sharing services were operating outside the act.

Mr Samuel said motorists offering ride-sharing services would not have to be classified as taxis in Victoria. They could be classified as hire cars, for which licence conditions have been relaxed in the past few years.

"Essentially, if you are a commercial passenger vehicle, which is a vehicle where passengers are carried for reward or profit, then you need to be registered as a commercial passenger vehicle but we then impose certain conditions on hire cars, which are pretty, I have to say, they've been wound back significantly because we want to open the market to competition," Mr Samuel said.

He said drivers would have to use registered commercial passenger vehicles, and have passed the relevant tests.

"There are a lot of things we can accommodate in this area in terms of licence fees, drivers," he said.